Unilever is reportedly set to name the Netherlands as the location of its sole global headquarters amid growing pressure over the UK’s withdrawal from the European Union (EU).
The company announced last April that it would review its dual-headed structure in the UK and the Netherlands as part of the fallout from Kraft Heinz’s failed $143 billion approach.
It also put its spread business up for sale, finally reaching an agreement in December to sell the brands – including Flora, Stork and Blue Band – to American private equity group KKR.
According to the Financial Times, UK government officials are now ‘braced’ for Unilever to favour Rotterdam, the site of one of its two headquarters, as the base for its global operations. It is thought that the company might be partly motivated by Brexit, with little more than a year remaining for the UK to negotiate the terms of its withdrawal from the EU.
“Unilever has a dual legal structure involving two parent companies, two headquarters in Rotterdam and London, holds two annual meetings and has two separately listed companies,” the FT explained.
Currently, one of Unilever’s two headquarters is in central Rotterdam. © Google
The newspaper reported that, while a decision had not yet been taken, Unilever could settle the fate of its future headquarters at a scheduled board meeting in March.
Group chairman Marijn Dekkers and CEO Paul Polman are both Dutch, while Mark Rutte, the Dutch prime minister who has lobbied Unilever to make Rotterdam its sole headquarters, is a former employee of the company.
By abandoing its offices in the UK, Unilever would bring to a close a significant chapter in the company’s long history. The group originated from the merger between Dutch margarine manufacturer Unie and British soap company Lever Brothers, and Unilever’s factory in Port Sunlight, Merseyside – the original Lever Brothers site – is today still the location of Unilever’s home care and personal care R&D.
It is also a prime example of a model village, built by the Lever brothers to house staff at its soap factory along similar lines to Cadbury’s Bournville.
Organisations are not legally required to be listed in the same country where they have their global headquarters, meaning Unilever could conceivably operate out of the Netherlands while retaining its listing on the London stock exchange.
Currently, one of Unilever’s two headquarters is in central Rotterdam. It is not clear whether Unilever would need to find a new site in the city to accommodate extra staff.
Unilever said last year that “our dual-headed legal structure adds complexity”, particularly when negotiating de-mergers of failing business units like its recently sold spreads division, hence a need for the change.
Kraft Heinz’s audacious $143 billion offer 12 months ago prompted serious introspection from the Anglo-Dutch company, which instigated a share buyback programme worth €5 billion to demonstrate the strength of its business and established a target ratio between net debt and pre-tax earnings of 2:1.
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